• Shipping services


    Liner services are regular, scheduled shipping services between fixed groups of ports that operate regardless of cargo availability. Tramping vessels on the other hand make irregular, opportunistic calls at ports when cargo is available. In theory vessels can also be chartered for larger tonnages but chartering is a complex business and conditions for each charter must be negotiated individually. Shipment on chartered vessels is usually arranged by importers. For a while in the early 1990s for cost reasons, chartering to the United States became extremely popular, especially for shipments from Brazil but also for coffee from Central America. Chartering became so popular, in fact, that the Green Coffee Association established a Charter Party Agreement for Coffee. It is a very good document but ironically, by the time it was approved by the GCA Board and adopted by the membership, liner freight rates had come down enough to make chartering unattractive. The document still exists, but it has yet to be used by the industry.

    Unless specifically stated to the contrary, all coffee contracts automatically stipulate that shipment will be by liner vessel, operated under a regular, scheduled service.

    Conferences are groups of ship owners who jointly offer regular sailings by guaranteeing the number of vessels that will be available during the year between different ports and the schedules that will be maintained. Most scheduled ocean liners used to operate under liner conferences (known simply as conferences). Conference systems schedule and guarantee sailings to and from an agreed range of ports, thereby eliminating duplication among their members. The system was thought to benefit both sellers and buyers because freight rates were fairly stable, schedules were published well in advance, and regular and dependable services were provided.

    However, in October 2008 the European Union discontinued its block exemption from anti-trust rules for shipping line Conferences. This meant that shipping lines may no longer deal with freight rate negotiations en block and instead must now negotiate freight rates and schedules separately with their individual shippers and/or receivers. Similar moves appear to be afoot in the United States and elsewhere.

    Vessel sharing arrangements (VSA) or alliances are a variation on the traditional conference system. In VSA, several carriers may offer a joint service by agreeing a frequency and capacity from and to certain ports. The lines share the vessels each contributes but each carrier markets and sells freight space on an individual basis. Individual freight contracts can still be negotiated with each line and depending on the space available receivers can also nominate a choice of carriers for the goods. (For most shipments, the receiver rather than the shipper is the freight payer and negotiator.) The advantage for the shipping lines is better cost-control and increased efficiency; for receivers there is more flexibility in that they can negotiate rates and in a sense ‘play the market’. But the number of sailings is not necessarily guaranteed and may be varied, for example to stabilize freight rates.

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